Do Modern Artists Really Need Record Labels?

Do artists operating in today's music economy really need record labels to succeed, or can they simply rely on administrative royalty collection services like Kobalt? The answer may depend on how established the artist already is.

Here’s a very interesting video from The Economist that looks at the new dynamics of the record business and whether an artist really needs a record label these days. It’s a veiled advert for Kobalt, but frankly, that company is way ahead of the game when it comes to not only collecting artist royalties, but reporting them as well.

I had a personal demonstration from founder Willard Ahdritz a few years ago and it was indeed impressive in that an artist could see in real time how much he was making. This, of course, beats having to wait until the end of the quarter or even the end of the year to see a statement to see how much you’ve earned.

As the video correctly points out, Kobalt is perfect for an established artist, but the company has yet to break a new artist, and this is where record labels traditionally excel. Major labels are also able to take a successful artist and boost her to superstar status because of the infrastructure they have in place, something that can’t be easily replicated.

So there is a place for the record label in today’s Music 4.0 world, but there’s also a place for a rights management firm like Kobalt. Check out the video as well as this interesting article to learn a lot more.